Geron (GERN) Posts Narrower-Than-Expected Loss In Q2

Geron Corporation (NASDAQ:GERN) reported a loss of 5 cents per share in the second quarter of 2016, in-line with the year-ago loss but narrower than the Zacks Consensus Estimate of a loss of 7 cents per share.

Total revenues declined 15.9% from the year-ago period to $211,000 in the second quarter of 2016. The Zacks Consensus Estimate forecasted no revenues for the second quarter.

Revenues included royalty and license fee revenues under various non-imetelstat agreements.

Research and development (R&D) expenses declined 4.2% from the year-ago period to $4.6 million reflecting the impact of lower personnel-related costs following the Mar 2015 organizational resizing as well as lower costs for the manufacturing of imetelstat, partially offset by higher costs for the company’s share of development expenses under the imetelstat collaboration with Johnson & Johnson’s (NYSE:JNJ) Janssen Biotech.

R&D expenses are expected to increase during the remainder of the year as the development of imetelstat continues.

Imetelstat is currently in a phase II study (IMbark) in patients with DIPSS intermediate-2 or high-risk myelofibrosis who have relapsed after or are refractory to a JAK inhibitor. An internal review to determine the adequacy of one or both of the initial dosing arms is slated to take place by the end of the third quarter. Based on this review, a decision will be taken regarding the continuation/halting/modification of the dosing arms or the selection of alternative doses. Meanwhile, another internal review including longer follow-up with patients in the study for at least 24 weeks, is expected by year end.

Imetelstat is in a phase II/III study (IMerge) as well for myelodysplastic syndrome (MDS). An internal review of this study (to support advancement into Part 2) is also expected in the second half of the year.

General and administrative expenses increased 12.5% to $4.5 million reflecting higher non-cash stock-based compensation expense and increased allocation of facilities and other overhead costs to general and administrative activities.

Geron is currently working on expanding its pipeline – the company is seeking to add new oncology candidates, programs or companies to its portfolio.

Geron is a Zacks Rank #3 (Hold) stock. We are positive on the company's agreement with Johnson & Johnson which provides it with a strong partner as well as funds. The company’s growth prospects currently depend entirely on the successful development of imetelstat which is its sole pipeline candidate.

We expect investor focus to remain on imetelstat and business development updates.

GERON CORP Price, Consensus and EPS Surprise

GERON CORP Price, Consensus and EPS Surprise | GERON CORP Quote

Some better-ranked stocks in the health care sector include Agenus Inc. (NASDAQ:AGEN) and ANI Pharmaceuticals, Inc. (NASDAQ:ANIP) . Both are Zacks Rank #1 (Strong Buy) stocks.

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